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The apps taking on social care’s ‘broken’ business model

A new breed of technology-driven care providers is slashing costs, but will money be reinvested into care worker salaries?

Leila Karim* started doing care work two years ago, earning £8 an hour. It was, she says, a “chaotic” experience. There was a different manager every two to three weeks, the systems were all paper-based and “it was difficult getting to clients on time because we weren’t told when our next shift was”, says the 19-year-old student. “Sometimes you’d get a call at 6am to cover a call in the next hour or two.”

The problems of the care industry are well known. Staff turnover is high and pay is low. Many care providers say margins are too small to enable them to pay above the minimum wage.

But a new breed of care provider has emerged, offering higher wages and, they say, a greater commitment to quality. Backed by £400,000 of investment (co-founder Naushard Jabir also works for Hambro Perks, a small venture capital company), Vida has a network of self-employed care workers. They are paid £11.50 per hour, rising to £13.50 after six months. The flexible model makes it attractive to students, though it plans to offer permanent jobs to the best employees in the long-term.

Clients, who are charged £15 an hour, receive one-hour visits as a minimum. After all, “what kind of care can you reasonably deliver within the space of 15 to 30 minutes?” asks Vida co-founder Devika Wood.

Jabir points to the fragmentation of the homecare market, with 8,500 different agencies operating around the country: “They don’t benefit from economies of scale.” The reason Vida can work on slimmer margins, says Jabir, is down to its technology platform.

Karim, who works part-time for Vida, welcomes the higher pay and says her new employer is better organised: “Vida makes sure that we are aware of a shift at least a week in advance, and we are constantly in touch with care managers through WhatsApp and text.”

Jabir and Wood highlight the fact that the initial matching of client and care worker is carried out by an algorithm to ensure a good fit. But as Gillian Manthorpe, director of the Social Care Workforce Research Unit at King’s College London, points out, any good care provider would aim to do the same: “Who would say, ‘We are deliberately going to choose people who you get on badly with?’”

Other traditionally paper-based processes have also been replaced by digital ones at Vida. Each care worker sees their daily schedule on a smartphone app, and are told what time they need to leave home to reach their first client. As they leave, they record this on the app and an alert is sent to the client (or their family) to let them know they’re on the way.

The client’s care plan is also on the app, so the care worker knows exactly what they are supposed to do and records when they’ve done it. If a care worker records a problem, such as a symptom of illness, a notification is sent to the care manager so any developing problem can be identified and acted on before it becomes serious.

Although Vida was set up a few months ago, HomeTouch has been using a similar model for nearly two years. The agency’s 450 care workers are self-employed and set their own rate from which the company takes a 20% commission (including VAT). The savings are passed on to both care worker and client. Workers earn up to 75% more than they would through a traditional agency, says founder Jamie Wilson.

Shirley Ayres, co-founder of the Connected Care Network, says the traditional model of care is “broken” and welcomes the introduction of new, technology-based provision. Ayres believes the change is partly driven by the introduction of personal budgets.

“An increasing number of people are self-funding their care, and that is also changing the model,” she says. “They’re not going to the local authority at all. They’re going directly to providers. So many organisations in the commercial sector are going online, because it saves costs and enhances the quality of their service. That is a logical way for care to go.”

Is the new, technology-driven model viable in the long term? HomeTouch has plans to expand “significantly”, says Wilson, while Vida hopes to extend its model to Europe on a franchise basis. Wood believes that its ability to collect tracking data that can monitor outcomes will be attractive to local authorities who want to partner with new care providers.

It’s early days, but Ayres believes that using technology to slash costs can enable providers to offer better quality care. She does, however, have a warning: “Any agency that isn’t using the money saved in transaction costs to pay more to carers is making a big business mistake.”